Competition in the Nigerian beer market heightened in the last two weeks as the industry witnessed two major launches by Nigeria’s top brewers.
Nigerian Breweries launched Tiger Beer into the Nigerian market, while International Breweries unveiled Castle Lite.
Tiger Beer had been present in other parts of the world, notably Singapore, South Africa, India, Thailand and the United States to mention a few just as Castle Lite had been present in several African countries.
The launch of the two beers, according to industry analysts, means heightened competition between both brewers.
International Breweries is fast catching in on the change in the trend to lighter and much cheaper beers and has concluded plans to unveil a new brewery in Shagamu by in the next few months to compete for Lagos market, ostensibly the largest in Nigeria.
With an average beer consumption of 12.28 litres per year, Nigeria leads the top 10 biggest beer-drinking countries in Africa, according to World beer consumption report 2016.
The report also revealed that beer makes up just 16 percent of alcohol consumption in Nigeria, while other drinks make up 84 percent due to the high popularity of home-brewed beverages in the country.
On the Africa continental ranking, Uganda was ranked second with 11.93 litres per year; Botswana is third (7.96 litres per year) and Kenya in the fourth position, with 9.72 litres per year.
In research also conducted by a Nigerian-based marketing research company, MRIC, in November 2015, the report indicated high alcohol among Nigerians. The report further stated that most alcohol consumers in the country are now switching to herbal mixed alcoholic drinks.
This trend saw a rise in the alcoholic brand such Aloma Bitters, Origin Zero and Origin, Star Herbal many other brands in this category.
At present, there are over 8 functional breweries in Nigeria with a cumulative production capacity of over 17.72 million hl/a majority. The majority of these breweries are situated in Southern part of Nigeria.
Both Nigerian breweries and International Breweries have flexing their muscles as Trophy from the latter has challenged Star, Guilder with penetrating pricing. Guinness, another major brewer is yet to respond to the market dynamics
NB’ s profits for the three months ended March 2018 show revenue dropped from N91.2 billion in 2017 to N82.9 billion in 2018. Profit before tax also dropped from N17.4 billion in 2017 to N15.2 billion in 2018.
While Inter Brew’s latest results show the company made a loss before tax of N2.5 billion due to an increase in finance charges resulting from its merger. Revenue, however, increased from N9.4 billion in the prior year to N25.9 billion in the current year (this could be attributed to post-merger effects).
NB shares closed at N124.40, down 4.60 percent in Monday’s trading session while International Breweries closed at N49.25, down 4.92 percent.
Frontpage August 29, 2019